Cheaper, BoJ Decision Absorbed With Little Impact

ACGBs (YM -6.0 & XM -6.5) sit in the middle of today’s Sydney session ranges after the RBA Minutes did not serve as a significant domestic market driver ahead of the BoJ Policy Decision, which stood out as the focal point for today’s Asia-Pac session.

• The RBA board considered two options at the Dec meeting, a rate hike or holding steady. The on-hold outcome won out with the RBA in a wait-and-see mode, particularly with so little fresh data compared to the prior meeting in November.
• The BoJ decision revealed unchanged policy parameters, as expected. Nevertheless, the market exhibited a mild strengthening following the announcement, indicating that certain participants had positioned themselves for a potentially hawkish surprise. The market now awaits Governor Ueda’s press conference at 15:30 Japan time today.
• The domestic market and US tsys have absorbed the BoJ decision without significant impact, with the latter trading flat to 2bps cheaper in today's Asia-Pac session, despite the strengthening in JGBs.
• Cash ACGBs are 6bp cheaper, with the AU-US 10-year yield differential 2bps wider at +17bps.
• Swap rates are 5-6bps higher.
• The bills strip is cheaper, with pricing -5 to -7.
• RBA-dated OIS pricing is 2-6bps firmer on the day. 54bps of easing is still priced for Nov’24.
• The local calendar is empty tomorrow and Thursday.